Why Conservative Economics Doesn’t Work (In A Nutshell).

Here’s part of a comment I gave I thought worth passing on:

And both raising taxes and cutting spending stimulate the economy less, but giving tax cuts to the wealthy doesn’t solve the problem of high unemployment, because the rich don’t hire more people the more money they have, they hire more people the more demand there is for their products and services.  Putting money in the hands of the poor that spend every dime they get to get by creates the most demand.  Supply side economics is just lopsided, you can’t bolster the investment class enough to make up for people not having enough money to buy things.  As someone said at a TED talk, there aren’t enough rich people to power a great economy because while he (the speaker) makes a few hundred or a few thousand times the average income, he doesn’t buy a few thousand pairs of pants or drive a few thousand cars or eat out a few thousand times a month.  Giving to the rich doesn’t stimulate the economy, at least not by itself.

Imagine you’re bill o’reilly.  You make ten million a year and you think it sucks that you have to pay a big chunk of that in taxes.  But imagine if that money went to a works program and got millions of people working again, or any of a dozen programs to lessen poverty and strengthen the middle class – your taxes might not go down any, but a lot more people will be able to afford cable, and more viewers = more money.  The poor and middle class are the grass on which businessmen graze – pouring a little water on them every so often isn’t a bad thing for anyone.

About agnophilo

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14 Responses to Why Conservative Economics Doesn’t Work (In A Nutshell).

  1. Agree absolutely. Raising taxes on the rich, does not encourage people who put every penny into paying off debt or savings to suddenly start spending. However, there’s a slight bit of potential in that the extra cash could go somewhere that would encourage spending. For example, improving public transit would generally decrease the amount the public spends on gas. That might free up some money to spend on products, which would drive up demand, which would lead to more employees (Hopefully US labor.) I don’t think that’s going to happen though. :/ I haven’t seen any budget plans that include changes like that.I hate this idea that there are magical rich job creators out there who are saying “If only I had more cash! I would hire so many people even though demand hasn’t increased!” While I’d like to see a lower corporate tax rate, I would also like to see big corporations with less leverage over the government somehow. Perhaps a tax on investment gains or something? 

  2. Amandascowen says:

    My opinion is tax breaks to the  wealthy  doesn’t effect the economy for  good or  bad,  economically,  it is assinine.If it’s say a franchise they could grow if the CEOs  get tax breaks the money couldbe put into  the corporation but  if the demand  for commodity is not there, that’s not going to  make a difference on overall growth profit.  What I feel  is  warranted is   focusing on major tax exemptions/breaks for not the poor but the middle class, baring in mind that the middle class is the ones that really  ‘teeter between’ buying consumer goods at full retail cost and cut spending or finding bargin second hand deals on ‘ebay” or at the bottom discount  price.  Tax breaks on the middle classed income bracket, for those that will use the money to go to say “Best buy ‘ and by a  laptop at full  price NEW over  tax breaks on the  superwealthy that  regardless of if  having higher taxes will still  go in and buy at full price, is the difference.

  3. TheSutraDude says:

    if lopsided tax breaks to the wealthy created jobs we’d be celebrating George W. Bush as a job creator. let’s blast another gaping hole through the conservative delusion that claims people who can’t find jobs are lazy and it’s the government who creates lazy people. let’s do this by giving even greater tax breaks to the wealthy and, suspending our disbelief for the moment imagine the wealthy will then turn around and put that additional pocket money into creating jobs. as you pointed out the poor and middle class will still not have money to spend to justify demand for the newly created jobs. what we’ll have is a bunch of people sitting around doing nothing in their new jobs because there is not the demand. when seen in this light it is actually tax breaks to the wealthy that creates lazy people. if there aren’t customers there’s not much to do but blog on Xanga all day.  

  4. If there was total honesty and good stewardship with all money that was collected,ANY economic plan would work.Your O’Reilly plan would not work because of who would be in charge of redistributing his money.When people are in charge of other peoples money,dishonesty raises it’s ugly head,it doesn’t matter if it’s conservative thinking or liberal.

  5. Ronald Reagan produced an economic boom. Clinton’s GOP Congress continued it. George Bush lowered tax rates which stimulated the economy and produced a record breaking gusher of tax revenue to the Treasury.And then the Democrats take over in 2007 and the economy implodes.Your hallucination doesn’t jive with reality.

  6. TheSutraDude says:

    @PrisonerxOfxLove – you and your misuse of the word hallucination. the economy did not implode in 1 year. i worked on Wall Street. the banks were heading downhill on a skateboard by 2006, earlier actually. it started full tilt in 2001 when full deregulation kicked in. i remember the declaration of a senior vice president at the firm during a conference. what gusher of tax revenue to the treasury. Bush took us into Iraq, unpaid for. it was tantamount to putting $100 in the bank and putting $10,000 on the credit card then saying, “look at all the money i have in the bank.” Clinton left us with a $900 billion surplus and republicans went on a spending spree. two wars, one of which was justifiable…the cheapest one, Medicare D, and tax breaks mostly to the wealthiest. Bush left us with an $11.9 trillion deficit. oh and Reagan left the country in a deficit and with what was to become a failed economic policy. even his economic adviser who pressed for trickle-down economics now admits he was wrong as does former trickle-down advocate Alan Greenspan. have a good night hallucinating on 

  7. @TheSutraDude – Since the Democrats took control in 2007, our standard of living has decreased 7.2%. 4.8% of that decrease took place during the Obama regime.You folks need to understand, that killing America is exactly what the Democrat Party intends.Fixing an economy is very straight forward. It’s been done many times before.

  8. @TheSutraDude – You comment is the description of an alternate reality. When people do what you do, it’s called hallucinating.My use of language is precise.

  9. TheSutraDude says:

    @PrisonerxOfxLove – your take on causation is way off the mark. ask Alan Greenspan. trickle-down economics was the same economic reasoning that led us into the Great Depression and you know what Einstein said: the definition of insanity is repeating the same thing and expecting different results. income disparity was the same in 2008 as it was when the Great Depression hit. after WWII household income for the wealthy and the middle class grew at the same pace until the early 1980s. after the onset of trickle-down economics middle class economic growth flat lined while the income of the top 2% began to skyrocket right up until the 2008 economic collapse. it was Mitch McConnell and other republican leaders who decided in a meeting the night of Obama’s inauguration they would not pass any bill that would help America in this economic crisis. Newt Gingrich admitted to being at that meeting and Mitch McConnell infamously said “the number one goal of the republican party is to make this President fail.” you need to understand, that killing America is exactly what the republican party intended which is why Congress has been at an historical low approval rating averaging 10% since the summer of 2011. you also need to understand in spite of the best efforts of republicans in Congress we have seen 29 straight months of private sector job growth. as for your constantly calling 2007 the year when everything went to hell, the downward trend line was already in full throttle years before 2007. 

  10. TheSutraDude says:

    @PrisonerxOfxLove – your lack of the use of actual facts is less than precise, to be kind. 

  11. @TheSutraDude – People who hallucinate alternative realities are not interested in the facts. They just make stuff up in order to get through the next moment.

  12. @TheSutraDude – If you’d ever get out of your bubble and take action to learn about reality, you might want to come over to my blog. I post the data and the studies.Btw, your long, rambling, incoherent comment is an example of another hallucination.

  13. I would leave a comment, but I see Curtis has fucked up your post again. So why bother. Get rid of the troll and I’ll read you again. 

  14. Nance1 says:

    Great post!  I wrote something similar today.

Speak yer mind.

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